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Mon 26 Mar 2018

Residents hit with bill to remove dangerous cladding

The First-tier Tribunal Property Chamber (FTTP) has made its determination on the Citiscape building in Croydon, a private residential block where the cladding used in its construction failed testing in the wake of the Grenfell Tower disaster as it was found to be inadequately fire-resistant.

The Citiscape building houses 95 flats across two blocks with a car park which was built by Barratt in 2001. The freeholder is Proxima GR Properties and the block is managed by FirstPort as the management party into the tripartite lease.

Much to the dismay of leaseholders, the FTTP held that the cost of “waking watch” (until 19th December 2017 at least) and the renovations to the cladding costs are, on the construction of the lease terms in this development, costs which can properly and correctly be put through the service charge account for the block - for which the leaseholders are wholly responsible!

FirstPort has employed full time at the development since the Grenfell disaster at a cost of £4,000 per week. That has racked up a total bill of over £132,000 to date. Furthermore, the renovation of the Grenfell Tower-style cladding could, it is thought, cost up to £31,300 for each resident bringing the total cost to residents to be in the region of £1.8 million to £2 million.

FirstPort told the tribunal that it had "no other funding options" after being denied a loan by the Royal Bank of Scotland. Director of FirstPort, Paul Atkinson, said: "The bank wouldn't lend to us for that but they would be willing to lend to individual leaseholders."

Hundreds of buildings failed tests on their cladding in the months following the Grenfell Tower fire. The Tribunal was conscious in handing down its decision on the Citiscape Building, not to set a precedent across other blocks.

The FTTP said that the leaseholders may have claims against a number of parties: manufacturer; developer; local authority; and potentially DCLG if the relevant building regulations were not fit for purpose. The problem for leaseholders is that claims against other parties are likely to be long shots! In addition, the costs of running potential litigation will invariably be costly, and the leaseholders would be tied up in litigation which would make their flats unsaleable.

Until the matter is appealed or the government intervenes in some way, as far as the FTTP was concerned, whatever the final costs – the bill stops at the leaseholders. Could this mean leaseholders end up losing their homes?

Yashmin Mistry is Partner and Property Practice Group Leader at JPC Law.

For more information on this or any other landlord and tenant matter, please contact her: